For sure? Not sure that HLS is bound to AAC (though that’s the standard) as it’s just the container format. Could be transmitted MP3 10s chunks split and added metadata encoded by the distributor. Either way if you’re right about the JIT and buffering it would be trivial to stitch some ad markers in at that point.

But I’m sure independents/lower-volume shows at the very least operate like you’ve said. Makes sense.